May unemployment rate up to 9.1%; employers add just 54,000 to payrolls


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The nation’s job market took a turn for the worse last month as employers sharply pulled back their hiring and the unemployment rate edged up to 9.1%, the Labor Department said Friday.

The discouraging report provided the latest and strongest evidence of a sputtering economic recovery. In recent days, various data have pointed to a slowdown in manufacturing and consumer spending, as well as persistent weakness in the depressed housing market.


Employers in May added just 54,000 to their payrolls, less than half of what’s needed just to keep pace with the expanding working-age population. The measly job growth came after three straight months of solid job increases that averaged 220,000 a month.

Manufacturing, which had been leading the recovery, fell back in May, losing 5,000 jobs. Apart from healthcare and some professional services, notably accounting and computer systems work, there was little or no net job gain in other service-producing sectors of the economy. And local government continued to be a drag on the economy, shedding 28,000 jobs.

The jobless rate, after steadily declining during the winter, rose for the second straight month. Unemployment was 9% in April and 9.6% in May of last year.

There were indications that some of the economic weakness was due to temporary factors. Supply-chain disruptions stemming from Japan’s earthquake and tsunami in March most likely contributed to a loss of 3,400 in auto-manufacturing employment last month. Higher fuel prices, although easing a bit in recent weeks, also may have played a role in restraining hiring by retailers and restaurants, among other businesses.

For all employees on private-sector payrolls last month, which numbered about 131 million, hourly earnings averaged $22.98. That was up 41 cents from a year ago -- or 1.8%, which is below the current pace of inflation.

The number of officially unemployed held steady at about 13.9 million last month, but the share of those who have been without work for six months or more, the so-called long-term unemployed, jumped to 45.1%.


In addition, the ranks of part-time workers who said they couldn’t find full-time jobs stood at 8.5 million last month. And there were 822,000 discouraged workers who have stopped looking for jobs because they saw little hope of getting hired. Taken together, the percent of unemployed and underemployed was 15.8% in May, compared to 15.9% in the prior month.

Most analysts still expect the economy to pick up from the sluggish pace of growth in the first half of this year, but many have recently marked down their expectations for economic and job growth for the remainder of the year. Forecasters at Moody’s Analytics, a leading research firm, now see employers adding fewer than 200,000 jobs a month for the rest of this year, a pace that would barely make a dent in the high unemployment rate.


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-- Don Lee in Washington